Yes, it is competitive. It is probably slightly more expensive, but it is a very small expense. Most of the increase in expense would be from taxation.
The call for evidence on ideas to encourage the introduction of E10 was included in the consultation, but again that signalled only further discussion and delays. It is therefore not surprising that the industry appears finally to be losing faith. The Vivergo closure and the Ensus announcement demonstrate that jobs and investment in the bioethanol industry and the agricultural sector are hanging in the balance. When the Government announced the consultation, they said:
“This government is ambitiously seeking to reduce the UK’s reliance on imported fossil fuels and cut carbon emissions from transport. But drivers of older vehicles should not be hit hard in the pocket as a result”
of the introduction of E10.
On the cost, which the hon. Member for Upper Bann (David Simpson) mentioned, almost all cars built since 2000, and 95% of all cars on the road, are warranted to run on E10, and every new petrol car sold since 2011 is fully warranted to use E10, so about 5% of cars on the roads may have an issue. That includes classic cars, about which the right hon. Member for East Yorkshire (Sir Greg Knight) raised concerns. Any motorists uncomfortable with using a new fuel can always use the premium brands, which need to remain available.
When the fuel is introduced, the industry would be happy to work with the Department to support a public information campaign about E10, including a website with the compatibility details of all car makes and models. That information would also need to be provided at petrol pumps.
The cost of E10 would depend largely on tax levels. It is predicted that it would cost no more than 1p more per litre at the pump, or about £20 per day. Most of that is made up from taxation, rather than the additional cost. The Government could consider a reduction in vehicle excise duty to compensate for any small increase in running costs resulting from using the more premium fuel, so there is a way through this dilemma. There are straightforward solutions to the possible fuel price issue, but the Minister’s Department might be reluctant to introduce E10 due to concerns from a very small minority of motorists whose vehicles are not fully warranted to use E10. I hope that the Minister will clarify that.
On greenhouse gases, there are broader environmental issues to consider, as has been said. Transport represents 24% of total greenhouse gas emissions—higher than any other sector in the UK economy. It is 1.3% higher than it was in 2013. Bioethanol should be seen as a vital tool in helping to decrease those emissions. The UK is currently failing to reach its statutory targets on the amount of renewables used in transport, in line with the renewable energy directive and the UK’s Climate Change Act 2008. Bioethanol is one of the quickest, easiest and most cost-effective ways of meeting those targets. As has been said, the introduction of E10 would take the equivalent of 700,000 cars off the roads.
Up to its closure, Vivergo Fuels was working on projects with the University of Hull and Bangor University to explore the development of even more advanced biofuels, which would have delivered even greater environmental benefits. Ensus has been working with one of the winners of the Government’s advanced biofuel competition grants, Nova Pangea, to produce ethanol from biomass waste products. Unfortunately, the failure of the UK’s investments in first-generation bioethanol puts at serious risk further investments.
The introduction of E10 would also improve air quality by reducing particulates and carcinogens. In the light of the Environment Secretary’s recent announcements, it would make sense for E10 to be embraced. Benzene and butadiene emissions, both of which are highly carcinogenic, decrease with higher levels of ethanol blending in fuel. Additionally, the oxygen contained within ethanol helps the fuel to burn better and increases the efficiency of the engine, reducing the hydrocarbons that are released. E10 is clearly better for the environment than the current grades of petrol sold in the UK. The concerns over diesel have resulted in motorists moving back to petrol, and the growth in petrol hybrids means that addressing the carbon dioxide emissions from petrol cars is even more urgent.
Although a range of technologies, including electric cars, may play a complementary role in decarbonising transportation and improving air quality, the reality is that electric vehicles represent only a small percentage of overall car sales in the UK—currently around 6% of annual sales—and most are hybrid, so in the short to medium term bioethanol and E10 would make a significant contribution. To have the same environmental impact as the introduction of E10, we would need to replace 2 million petrol cars with electric vehicles immediately.
On foreign imports, the closure of the UK’s domestic production of bioethanol will mean a greater reliance in future on imports of bioethanol and soya bean meal, as a substitute for the high-protein co-product DDGS—distiller’s dried grain with solubles—animal feed, which is a by-product of the bioethanol process. Before its closure, Vivergo was the country’s largest single production site for animal feed. It delivered 500,000 tonnes of high-protein feed to more than 800 farms across the UK—enough for about 20% of the UK’s dairy herd. Incidentally, the fermentation process used at the Vivergo plant also made it the UK’s largest brewery.
Soya bean imports are already at about 1.8 million tonnes a year. The majority comes from non-EU countries, and therefore it is likely that it is from genetically modified crops. There will also be a negative impact on the domestic feed wheat market, as a valuable floor for farmers across the UK, which also enables a premium price in the north-east, will be removed. If Vivergo and Ensus were in full operation with mandatory E10, we would have a comprehensive bioethanol industry underpinning UK environmental progress and agricultural sustainability.
Without a British bioethanol industry, the UK will likely become increasingly reliant on imported bioethanol and bioethanol equivalents, predominantly using cooking oil, which is itself shipped many thousands of miles to the UK from China and the US. By contrast, Vivergo sourced its wheat an average of 34 miles from its plant in Hull, which supported sustainability by minimising transportation. The fact that more and more countries are starting to use their own wastes locally calls into question the long-term strategy of being very reliant on imported waste materials from across the planet to meet our decarbonising challenge. A greater reliance on imports will not just represent a missed economic opportunity.
Having addressed some of the clear economic and environmental benefits of introducing E10, I would like to reflect on where the UK sits in comparison with the rest of the world. E10 is already widely available across continental Europe, including in France, Germany, Belgium and Finland, and further afield in the USA, Australia, New Zealand and Brazil. In a real sense, the UK is lagging behind the rest of the world when it comes to the use of bioethanol-blended fuel. In some countries, including the USA and Brazil, much higher versions are available, including blends of up to 85%—E85—so the steps we are asking the Department to take are in no way radical or untested.
At a time of increasingly uncertain international trading circumstances, and in the context of leaving the European Union, E10 increases domestic supply for feed and fuel while lessening Britain’s reliance on foreign markets for both. The introduction of E10 would bring certainty to British businesses, investors and arable and dairy farmers, while supporting economic growth and securing thousands of existing high-skill, high-STEM jobs, and the creation of many hundreds more. Further research could make Britain a world leader in even cleaner and greener bioethanol.
The sustainability concerns over E10 are now resolved, and the renewable transport fuel obligation has resumed its trajectory and has doubled this year. Bioethanol is the cheapest means of meeting the renewable transport fuel obligation, but its contribution is constrained due to the fact that the UK has not yet introduced E10. Although a transition from E5 to E10 is regarded as inevitable and environmentally desirable, it has not yet happened, and the industry has endured years of delay. The DFT’s consultation process late last year did nothing to accelerate it and reassure the industry.
UK-produced bioethanol has excellent environmental credentials and makes an important contribution to the agricultural and food sectors. Without E10 in the British bioethanol industry, the UK will become even more reliant on imports of fuel, proteins and liquefied CO2, recent shortages of which, particularly during the World cup, have exposed the UK’s precarious supply position.
British motorists should have the freedom to make greener choices at the petrol pump. Any remaining concerns at the Department can be resolved and addressed with relatively simple solutions—getting the most polluting cars off our roads can only be a good thing. Many other major developed countries around the world either have already implemented E10 or plan to, and its introduction in the UK has been widely anticipated since 2013.
I urge the Government to now support the sector and mandate the introduction of E10 as a matter of urgency. If not, there is a real risk that the environmental and economic benefits, along with the significant investment and associated jobs created by the UK’s bioethanol industry, will be lost.